Housebuilding stocks pop as UK markets react to Labour election landslide

LONDON — London-listed stocks climbed broadly on Friday, led by housebuilders, as investors reacted to the Labour Party’s landslide U.K. election victory.

The U.K.’s FTSE 100 index climbed 0.26% as investors reacted to the election results. The broader pan-European Stoxx 600 index rose 0.45% in morning deals.

The primary news story on investors’ minds Friday was the result of the U.K.’s general election, with the opposition Labour Party winning a huge parliamentary majority, unseating the incumbent Conservatives after 14 years.

The FTSE 350 household goods and home construction index was up about 3.49% at 10:51 a.m. local time on Friday, as traders reacted to news of the Labour Party’s win.

Looking at individual stocks within the sector, Vistry Group and Persimmon shares were up 4%, Taylor Wimpey and Barratt Developments rose 3%, while Bellway climbed 2%.

Early on Friday morning, Labour passed the threshold needed to govern alone as outgoing PM Rishi Sunak conceded defeat. Keir Starmer, leader of the center-left Labour, will become the country’s next prime minister and declared victory in the early hours. Analysts expect the Labour victory to boost U.K. markets over time, particularly when it comes to housebuilding.

In a research note Friday, analysts at RBC Capital Markets said that if Labour’s election pledges turn into policy, it could mark the dawning of a “new age” for U.K. housebuilding.

“Over the last few years housebuilders’ potential has been hamstrung, but over the next few this potential is likely to be unleashed,” they wrote.

“If the new Government’s walk matches its talk we expect the sector to re-rate, and in the very short term we suspect that the talk alone will be enough to lift share prices,” they added.

In corporate news, French bank BNP Paribas and Swiss lender UBS are reportedly expressing interest in buying HSBC‘s German wealth-management unit, Bloomberg News reported Thursday, citing people familiar with the matter.

Shares of HSBC were down around 1% Friday.

In Asia-Pacific, markets were largely lower on Friday, with Japan’s Nikkei 225 paring gains after crossing the 41,000 mark and hitting fresh record highs.

Stateside, S&P 500 futures were trading 0.51% higher Friday as investors geared up for the release of a closely watched jobs report.